The medical instruments industry is currently undergoing a transformative phase, thanks to the rapid adoption of generative artificial intelligence (genAI) and digital therapeutics, which market watchers expect will take the healthcare industry by storm.
Since the beginning of 2023, the industry has been witnessing mass adoption of AI and the Internet of Medical Things in the form of digital healthcare options in hospitals and other healthcare settings.
GenAI has begun to showcase its proficiency across a range of healthcare fields, from time-consuming administrative tasks to critical areas such as technological discovery and clinical trials. GenAI, while analyzing vast and complex genetic and molecular data, is expected to help healthcare reach new heights in terms of predictive treatment options and smart hospital systems.
At this stage, it should be prudent to invest in stocks from the Zacks-defined Medical Instrument industry with a favorable Zacks Rank. We have selected five such stocks that have provided double-digit returns in the past month during which Wall Street suffered severe volatility.
These stocks are: DexCom Inc. DXCM, IDEXX Laboratories Inc. IDXX, NeuroPace Inc. NPCE, Fresenius Medical Care AG FMS and ClearPoint Neuro Inc. CLPT. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Zacks Investment Research
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DexCom Inc.
DexCom has benefited from an impressive contribution from the Sensor segment and domestic and international revenue growth have acted as the key catalysts. DXCM’s prospects with Stelo as an OTC monitor for type 2 diabetes bode well.
DXCM made continued advancements concerning key strategic objectives and ended the quarter with new patient additions. DXCM’s slew of tie-ups with AID systems is encouraging. A solid international foothold and robust product portfolio augur well. A strong solvency position is an added plus.
DexCom has an expected revenue and earnings growth rate of 14.3% and 23.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days.
IDEXX Laboratories Inc.
IDEXX Laboratories’ robust strategic execution is highlighted by new business gains, high customer retention levels and solid net price realization. This underscores the consistent growth in the CAG international business, supported by volume gains and global premium instrument placements.
IDXX’s software solutions are facilitating growth by enhancing clinic workflows and promoting greater utilization of diagnostics. Also, the consumable business boosts IDXX’s top line. IDXX is focused on growing its global commercial capability to sustain strong CAG Diagnostics recurring revenue growth.
IDEXX Laboratories has an expected revenue and earnings growth rate of 5.8% and 14%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
NeuroPace Inc.
NeuroPace operates as a medical device company in the United States. NPCE develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating drug-resistant focal epilepsy. NPCE’s RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories.
In addition, NPCE provides physician tablet and patient data management system; and nSight Platform, which facilitates ongoing patient monitoring and streamlines patient support. NPCE sells its products to hospital facilities for initial RNS System implant procedures and for replacement procedures.
NeuroPace has an expected revenue and earnings growth rate of 18.1% and 15.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.2% over the last 60 days.
Fresenius Medical Care AG
Fresenius Medical Care has been benefiting from strong organic growth on the back of improving treatment volumes as well as a stabilizing labor environment in the United States. Continued improvement in these two key factors should be beneficial for FMS in 2025. Overall pricing momentum also supported growth in the Care Enablement segment.
FMS’ newly implemented operating model led to operational improvements. FMS generated 221 million euros in savings in 2024 by implementing initiatives under the FME25 transformation program. FMS’ continued divestment of its noncore and dilutive assets seems promising.
Fresenius Medical Care has an expected revenue and earnings growth rate of 1.6% and 28.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last seven days.
ClearPoint Neuro Inc.
ClearPoint Neuro operates as a medical device company primarily in the United States. CLPT develops and commercializes platforms for performing minimally invasive surgical procedures in the brain under magnetic resonance imaging guided interventions.
CLPT offers ClearPoint system, an integrated system for the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters, as well as the infusion of pharmaceuticals into the brain.
ClearPoint Neuro has an expected revenue and earnings growth rate of 24.1% and 11.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 30 days.
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